Digital Technology in SCRM: A Qualitative and Exploratory Study on how Digital Technology can Improve SCRM

Abstract

Purpose: The purpose of this study is to examine how digital tools and systems can improve supply chain risk management (SCRM) in companies. This is an underdeveloped area in the literature, but one of high importance due to rising risk levels caused by increasing geopolitical tension, high inflation, climate change, and wars breaking out close to critical trade routes. Rather than focusing on specific tools, this thesis aims at providing a holistic understanding on how digital technologies fit within the area of SCRM.

Methodology: This study is mainly explorative, but with hints of descriptive and explanatory aspects. It is inductive and qualitative, using heterogeneous data sampling, semi-structured interviews, and thematic analysis to draw conclusions and construct a framework.

Findings: There are three main findings in this thesis. (1) In fully integrated ERM systems, risk identification, analysis, and monitoring merge together. (2) Digital technology can provide a wide range of benefits, including more and better data collection, complex data analyses and decision support, triangulation, and high-quality real-time data. These benefits can in sum provide deeper, better, and more reliable real-time insights on a larger part of the business environment, thereby enabling early-stage risk identification and more targeted risk mitigation. (3) Through constant monitoring of risk levels, the effectiveness of risk mitigation strategies can be indirectly assessed. If the risk levels remain high over time despite mitigation efforts, it indicates ineffective mitigation strategies that must be adjusted or replaced. Close monitoring of criticality, and the impact of mitigation strategies, can, over time, improve risk mitigation.

Key contributions: A framework is developed to better explain the relationship between technology and SCRM, taking contextual factors into account. It is a holistic framework applicable within different industry contexts, and provides a starting point for future research.

Key words: risk management process, SCRM, digital technology, framework

Purpose: The purpose of this study is to examine how digital tools and systems can improve supply chain risk management (SCRM) in companies. This is an underdeveloped area in the literature, but one of high importance due to rising risk levels caused by increasing geopolitical tension, high inflation, climate change, and wars breaking out close to critical trade routes. Rather than focusing on specific tools, this thesis aims at providing a holistic understanding on how digital technologies fit within the area of SCRM.

Methodology: This study is mainly explorative, but with hints of descriptive and explanatory aspects. It is inductive and qualitative, using heterogeneous data sampling, semi-structured interviews, and thematic analysis to draw conclusions and construct a framework.

Findings: There are three main findings in this thesis. (1) In fully integrated ERM systems, risk identification, analysis, and monitoring merge together. (2) Digital technology can provide a wide range of benefits, including more and better data collection, complex data analyses and decision support, triangulation, and high-quality real-time data. These benefits can in sum provide deeper, better, and more reliable real-time insights on a larger part of the business environment, thereby enabling early-stage risk identification and more targeted risk mitigation. (3) Through constant monitoring of risk levels, the effectiveness of risk mitigation strategies can be indirectly assessed. If the risk levels remain high over time despite mitigation efforts, it indicates ineffective mitigation strategies that must be adjusted or replaced. Close monitoring of criticality, and the impact of mitigation strategies, can, over time, improve risk mitigation.

Key contributions: A framework is developed to better explain the relationship between technology and SCRM, taking contextual factors into account. It is a holistic framework applicable within different industry contexts, and provides a starting point for future research.

Key words: risk management process, SCRM, digital technology, framework